Bitcoin price has seen a rise back above the $71,000 level over the past day as buyers appear to have returned to Coinbase.
Bitcoin Coinbase Premium has seen a significant positive rise
As CryptoQuant author Axel Adler Jr explained in a mail On X, the BTC Coinbase Premium indicator recorded a high value recently. “Coinbase Premium Index” refers to an index that tracks the percentage difference between Bitcoin prices listed on Coinbase (USDPair) and Binance (USDTPair).
When the value of this metric is positive, it means that the price of the cryptocurrency listed on Coinbase is greater than the price of Binance at the moment. This trend indicates that there is higher buying pressure (or just less selling pressure) on the first exchange compared to the last.
On the other hand, the indicator being negative indicates that there may be a greater amount of selling on Coinbase than on Binance at the moment, which previously pushed the price to a lower value.
Now, here's a chart showing the trend in the Bitcoin Coinbase Premium Index over the past few weeks:
The value of the indicator seems to have spiked quite high recently | Source: @AxelAdlerJr on X
As shown in the chart above, the Bitcoin Coinbase Premium Index has been mostly at negative levels over the past two weeks. Before this red line, the gauge experienced a phase of positive levels. Interestingly, the price of the cryptocurrency rose along with those green values. This means that buying pressure on Coinbase may have helped fuel the rally.
Coinbase is widely known to be the platform of choice for US-based institutional entities, while Binance hosts more global traffic. As such, the index value can provide hints about how the behavior of these American whales differs from the rest of the world.
This year, these institutional investors have taken center stage in the Bitcoin market by approving exchange-traded funds (ETFs), with their movements reflected in the price of Bitcoin. The previous pattern of potential buying pressure from these large US investors leading the rally is just one example of this trend seen at various points in the year.
As mentioned before, what has followed this accumulation has been negative values for the Coinbase Premium Index in the last two weeks or so. While this selling pressure has not caused any significant bearish effects on Bitcoin, the coin is still unable to make any further upward moves.
A glimmer of hope may have emerged last day, as the index recorded a significant positive increase. It is currently unclear whether this will lead to another buying streak like last month or is just a temporary deviation like the two short-lived rallies already seen last week.
Whatever the case may be, Bitcoin has been able to enjoy some bullish momentum over the past 24 hours, at least in part due to this buying pressure.
Bitcoin price
In this latest new boom, Bitcoin has so far managed to climb towards the $71,300 level. Now it only remains to see how far this run can continue.
Looks like the price of the asset has seen a surge over the last few days | Source: BTCUSD on TradingView
Featured image by Dall-E, CryptoQuant.com, chart from TradingView.com